The Chhattisgarh High Court has clarified that mere association with a business where fraudulent activity occurs does not, without direct evidence, justify denial of regular bail. In a case involving alleged issuance of 48 fake SIM cards, the Court emphasized the absence of incriminating material linking the applicant to the offence, reinforcing the principle that bail must be granted where the prosecution fails to establish a prima facie case of direct involvement.
Background & Facts
The Dispute
The applicant, Shubham Gupta, was arrested in connection with Crime No. 442/2025 registered at Police Station Abhanpur, District Raipur, for an offence punishable under Section 318(4) of the Bharatiya Nyaya Sanhita, 2023, which criminalizes fraudulent issuance of identity documents including SIM cards. The prosecution alleged that 48 SIM cards were fraudulently issued using the identity and photographs of unsuspecting individuals through a POS terminal registered to Gupta Telecom, a shop operated by the applicant.
Key Facts
- The Cyber Police Headquarters, Atal Nagar, Raipur, sent a letter dated 08.07.2025 reporting misuse of 48 mobile numbers for cyber crimes, including operations from abroad
- The numbers flagged included: 9617057870, 9977466167, 9977801335, and 45 others
- Three individuals - Pushpendra Kumar Sahu, Sandeep Kumar Sahu, and another Sandeep Kumar - were summoned and affirmed they had no knowledge of or possession over the SIMs issued in their names
- The POS ID linked to the fraudulent activity was 31581997SHUBUP2A, registered to Gupta Telecom, located near Shani Mandir, Bus Stand, Abhanpur
- The applicant was identified as the operator of this shop
- No recovery of the POS device, SIM cards, or call detail records (CDR) was made from the applicant’s possession
- The applicant submitted a duty certificate showing he was employed as a distributor for VI Company under Nikunj Traders
- His role, per company policy, was limited to SIM activation under digital KYC (including biometric verification), collection of dues, and supply of promotional materials to retailers
- Company policy mandated that only one SIM could be issued per person per day, and activation required the physical presence and biometric consent of the subscriber
- The applicant has no prior criminal antecedents
Procedural History
- 08.07.2025: Cyber Police Headquarters alerts authorities about fraudulent SIM usage
- 08.12.2025: Applicant arrested and lodged in custody
- Before 17.03.2026: Charge-sheet submitted before the competent trial court
- 17.03.2026: First bail application filed under Section 483 of the Bhartiya Nagarik Suraksha Sanhita, 2023
The Parties' Positions
For the Applicant
- Argued he was falsely implicated due to personal enmity and mala fide intentions
- Stated his role was purely administrative: activation of SIMs under company-mandated digital KYC procedures
- Emphasized that SIM activation requires subscriber presence and biometric authentication, making it impossible for him to issue SIMs without consent
- Highlighted that no incriminating material, including the POS device or SIMs, was recovered from him
- Noted that the prosecution relied solely on statements of third parties, yet to be tested in trial
- Pointed out that the charge-sheet has been filed and trial is likely to be protracted
For the Respondent/State
- Contended that the applicant, as owner of Gupta Telecom, was the central node in a fraudulent SIM issuance network
- Relied on the Investigating Officer’s affidavit stating that 48 SIMs were fraudulently issued using stolen identities
- Argued that the scale and nature of the offence - facilitating cyber crimes from abroad - constituted a serious threat to national security and public order
- Asserted that the applicant’s position as shop operator made him liable for the misuse occurring under his POS ID
Relief Sought
The applicant sought regular bail, citing his clean record, prolonged incarceration since 08.12.2025, and the absence of direct evidence linking him to the alleged fraud.
The Legal Issue
The central question was whether the applicant, who operated a telecom retail outlet where fraudulent SIMs were issued, could be denied regular bail under Section 483 of the Bhartiya Nagarik Suraksha Sanhita, 2023, in the absence of prima facie evidence establishing his direct, intentional involvement in the fraud.
Arguments Presented
For the Applicant
The applicant’s counsel relied on the principle that bail is the rule and jail the exception, particularly where the accused has no criminal history and the prosecution has not produced tangible evidence of direct culpability. He cited Arnesh Kumar v. State of Bihar to argue that gravity of offence alone cannot override the presumption of innocence. He emphasized that the digital KYC process, requiring biometric verification by the subscriber, rendered the applicant’s role passive and non-culpable. The absence of recovery of the POS device, SIM cards, or CDRs further undermined the prosecution’s case.
For the Respondent/State
The State contended that the applicant’s position as the registered operator of the POS terminal made him vicariously responsible for the fraudulent activity. It argued that the issuance of 48 SIMs using stolen identities constituted a systematic criminal enterprise, and the applicant’s failure to verify the authenticity of the applicants or report anomalies amounted to complicity. The State relied on the Investigating Officer’s affidavit and the nature of the offence - enabling transnational cyber crimes - to argue that bail would risk witness tampering and flight.
The Court's Analysis
The Court undertook a careful review of the case diary and the Investigating Officer’s affidavit. It noted that while the prosecution established that fraudulent SIMs were issued through the applicant’s POS terminal, it failed to demonstrate that the applicant himself engaged in any act of deception, forgery, or unauthorized use of identity documents.
"This Court observes that though the prosecution has alleged fraudulent issuance of SIM cards and on the basis of the Investigating Officer’s affidavit, there is no prima facie material to establish that any fraud has been directly committed by the present applicant."
The Court emphasized that the applicant’s role, as per his duty certificate and company policy, was confined to activation under mandatory digital KYC protocols, which require the subscriber’s biometric consent. The Court further observed that the prosecution had not produced any evidence - such as CCTV footage, internal logs, or digital trails - that showed the applicant bypassed or manipulated the system.
The Court also noted that the statements of the SIM holders, while incriminating on their face, were untested and subject to cross-examination. The absence of recovery of any incriminating material from the applicant’s person or premises was a critical factor. The Court held that mere proximity to the crime, without direct participation, cannot justify denial of bail.
The Court acknowledged the seriousness of the offence but reiterated that bail under Section 483 BNSS is not contingent on the gravity of the charge alone, but on the strength of the prima facie case against the accused. Given the applicant’s clean record, the length of his detention since 08.12.2025, and the likelihood of a prolonged trial, the Court found no compelling reason to deny him liberty pending trial.
The Verdict
The applicant succeeded. The Chhattisgarh High Court granted regular bail to Shubham Gupta in Crime No. 442/2025, subject to the following conditions: (i) he shall not seek adjournments when witnesses are present; (ii) he shall appear before the trial court on all dates, personally or through counsel; (iii) if a proclamation is issued under Section 84 of BNSS and he fails to appear, proceedings under Section 209 BNSS shall be initiated; and (iv) he shall personally appear for the opening of the case, framing of charge, and recording of statement under Section 351 BNSS. Failure to comply with any condition may be treated as abuse of bail and result in cancellation. The applicant was directed to furnish a personal bond with two sureties in like sum.
What This Means For Similar Cases
Bail Cannot Be Denied Solely on Proximity to Fraud
- Practitioners must argue that mere operation of a business where fraud occurs does not equate to personal culpability
- Absence of recovery of incriminating material or digital evidence is a decisive factor in bail applications under BNSS
- The burden remains on the prosecution to establish direct, intentional participation, not just association
Digital KYC Compliance as a Defense
- Where statutory or company procedures require biometric verification by the subscriber, the accused can argue they acted as a facilitator, not a perpetrator
- Duty certificates and company policies should be submitted as evidence of compliance and lack of intent
- Prosecution must prove deliberate circumvention of KYC protocols to establish criminal liability
Protracted Trials Favor Bail
- Lengthy pre-trial detention without prima facie evidence strengthens the case for bail
- Courts are increasingly willing to grant bail where charge-sheets are filed and trial timelines are uncertain
- Conditions can be tailored to ensure court appearance without imposing undue restrictions
